Product Assessment. BetaShares Australian Top 20 Equity Yield Maximiser Fund (managed fund) Report data as at 31 Aug 2018 Rating issued on 04 Oct 2017

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1 Report data as at 31 Aug 2018 Rating issued on 04 Oct 2017 Product Assessment Highly Recommended Recommended Approved Not Rated Redeem BetaShares Australian Top 20 Equity Yield Maximiser Fund (managed fund) APIR Code ASX:YMAX Asset / Sub-Asset Class Australian Shares Exchange Traded Products - ETP Investment Style Index Investment Objective To provide exposure to a basket of 20 blue-chip Australian shares (as represented in the S&P/ASX 20 Index), while providing attractively quarterly income that exceeds the yield of a portfolio of the underlying shares over the medium term. The Fund also aims to provide lower volatility than the underlying portfolio. Zenith Assigned Benchmark Solactive Australia 20 Index (GTR) S&P/ASX 300 (Accum) Net Returns (% p.a.) 5 yrs 3 yrs 1 yr Fund Benchmark Median Income (% p.a.) Income Total FY to 30 Jun FY to 30 Jun FY to 30 Jun Fees (% p.a., Incl. GST) Management Cost: 0.76% Performance Fee: N/A VIEWPOINT The Fund aims to provide exposure to equities included in the Solactive Australia 20 Index, while providing quarterly income that exceeds the yield of a portfolio of the underlying shares over the medium term, by implementing an options overlay. Zenith believes that given the Fund's systematic process, we would prefer BetaShares to provide an explicit benchmark (internally or externally), against which the options strategy can be assessed. We believe that this transparency will improve the accountability of BetaShares and ultimately the Fund. The Fund's issuer is BetaShares Capital Ltd (BetaShares), a specialist provider of ETFs which was established in 2009 and first launched a listed product in BetaShares is a wholly owned subsidiary of BetaShares Holdings Pty Ltd which is a subsidiary of Mirae Asset Global Investment Group (Mirae). As at 31 August 2017, BetaShares had $4.2 billion in funds under management across 42 managed products. Mirae, established in 1997, is a large Asian asset manager based in South Korea that managed in excess of $US 100 billion in assets as at 31 August Mirae offers global support to BetaShares, through its 85% stake in Horizons ETFs, as well as strategic direction at the board level. Based in Sydney, the BetaShares investment team of four is led by Chief Investment Officer Louis Crous. Crous has over 14 years experience in financial services from prior roles at nabinvest and Rand Merchant Bank. Crous is responsible for the day-to-day operational control of all BetaShares ETFs. Zenith notes that the BetaShares product suite has expanded rapidly in recent years and while it has not presented any adverse issues to date, Zenith believes the investment team is less well resourced compared to peers. Although the Fund's approach is traditionally process based, which limits the threat of key person risk, Zenith believes a degree of key person risk rests with Crous. The Fund seeks to earn income from dividends, franking credits and option premiums while participating in some capital appreciation from holding a passive portfolio of securities included in the Solactive Australia 20 Index at their constituent weights. BetaShares expects to achieve an average option premium yield of 3% p.a. to 6% p.a. over the medium-term. In August 2018, BetaShares changed the Fund index from the S&P/ASX 20 Index to the Solactive Australia 20 Index. As part of this change, the Fund management fee reduced from 0.79% p.a. to 0.76% p.a. Although both indices use a market capitalisation weighting methodology, Zenith notes there are likely to be minor differences in constitutes between the two indices over time as a result of buffer rules. However, given the high weighting to the top ten in each index, and the strategy of the Fund, differences in fund performance should be relatively minimal. NOTE: Zenith ratings applied to ETFs do not take into account price volatility or direction and do not represent a buy/sell recommendation based on an ETF's valuation. Potential investors should make their own determination of the appropriateness of prevailing trading prices when utilising ETFs. FUND FACTS Passive equity exposure to the Solactive Australia 20 Index The Fund uses a derivative overlay to generate extra income Lower effective market exposure than long-only peers Market capitalisation of approximately $399 million as at 31 August 2017 ABSOLUTE RISK (SECTOR) VERY HIGH HIGH MODERATE LOW VERY LOW INCOME DISTRIBUTIONS PER MONTH QUARTER 6 MONTH ANNUM RELATIVE RISK (FUND WITHIN SECTOR) Geared Active - Benchmark Unaware Active - Benchmark Aware Index - Enhanced/Fundamental Index INVESTMENT TIMEFRAME 1-2 YRS 3-4 YRS 5-6 YRS 7+ YRS Zenith charges a fee to the Product Issuer to produce this report. For further information please refer to the Disclaimer & Disclosure at the end of this report.

2 APPLICATIONS OF INVESTMENT SECTOR CHARACTERISTICS The Zenith Australian Shares - Exchange Traded Funds sector consists of all ETFs investing in the Australian equity market. The sector incorporates a range of ETF styles including: Market Beta ETFs Alternative Beta ETFs (non-market cap weighted) Active ETFs These products may encompass a range of strategies across the market capitalisation spectrum or adopting sector specific themes. Zenith benchmarks all ETFs against their specific benchmarks as well as against the S&P/ASX 300 Accumulation Index, believing it is a fair representation of the investment universe for the underlying managers. The Australian share market, as represented by the S&P/ASX 300 Index, is highly concentrated and narrow. Technically, a company is considered large cap if it falls within the S&P/ASX 50 Index, with companies falling between the S&P/ASX 50 and S&P/ASX 100 considered mid cap. All stocks outside of the S&P/ASX 100 Index are considered small capitalisation stocks. As at 31 May 2017, the Financials and Resources sectors combined represented a significant portion of the S&P/ASX 300 Accumulation Index, with the Financials sector accounting for approximately 36% of the index, and Materials approximately 16%. The split between Industrials and Resources stocks was approximately 80%/20%. The top 10 stocks represented approximately 46% of the weighting of the Index, and the top 20 stocks represented over 56% of the Index. PORTFOLIO APPLICATIONS In general, compared with other asset classes, equities offer investors the opportunity for higher capital growth over the longer term with some income. However, this higher growth is also often associated with higher volatility. Therefore, it is recommended that investors adopt a longer time frame when investing in equities. Investors should also be cognisant of the fact that the Australian equity market is relatively concentrated, with the Materials and Financials sectors dominating the market; the market also only represents approximately 1% of global equity markets (in terms of market capitalisation). Therefore, to mitigate this concentration risk it is highly recommended that investors diversify their investments across asset classes, both domestically and globally. With a distinct income focus, the Fund differs from the majority of funds within the Australian equity market. The strategy is deliberately employed to generate a differentiated risk/return profile. When compared to most other Australian equity funds, the Fund offers a lower level of potential capital growth which is offset by an enhanced level of income. Zenith believes the Fund can be used as a satellite exposure to Australian equities, blended with a core equities product to enhance portfolio income levels. The Fund is best suited to income seeking investors who desire a lower level of volatility. Given the nature of the strategy employed by the Fund, portfolio turnover is expected to be high. Therefore, Zenith believes the Fund may suit investors with lower marginal tax rates. RISKS OF THE INVESTMENT SECTOR RISKS Funds within the Australian Large Cap sector are exposed to the following broad risks: MARKET & ECONOMIC RISK: As is the case with all long only Australian Share funds, the biggest risk to performance is a sustained downturn across the Australian share market. In addition, changes in economic, social, technological or political conditions, as well as market sentiment could also lead to negative fund performance. This risk can be significantly reduced by investors adhering to the Fund's prescribed investment time frame. SPECIFIC SECURITY RISK: This is the risk associated with an individual security. The price of shares in a company may be affected by unexpected changes in that company s operations such as changes in management or the loss of a significant customer. LIQUIDITY RISK: This is the risk that a security or asset cannot be traded quickly enough, due to insufficient trading volumes in the market. When trading volumes are low, sellers can significantly impact the price of a security when attempting to quickly exit a material position. STYLE BIAS RISK: Australian equity managers will either employ a Growth, Value or Neutral (combination of Value & Growth) styled approach to investing. Each style is conducive to certain market conditions. For example, Growth should outperform Value in an upward trending market and vice versa in a downward trending market. As with Market Risk, investors should adhere to the Fund s investment time frame to avoid short-term market movements and style impact. CAPACITY RISK: High levels of funds under management (FUM) can present additional challenges to an Australian equity manager, as high FUM has the potential to hamper the manager's ability to trade efficiently and/or be forced to disclose substantial shareholdings to the market (most common in smaller companies). REGULATORY RISK: The ASIC Regulatory Guide 97 Disclosing Fees and Costs in PDSs and Periodic Statements' came into effect on 1 October 2017, and seeks to establish a common framework for disclosing fees with respect to registered managed investment schemes issued to retail investors. The guide is currently under review by ASIC, with final recommendations expected to be made before the end of In its current form, RG97 is not expected to impact the actual costs (or net returns) on existing investments. Rather, the guide is focused on providing increased transparency with respect to the costs of management. Given this, it is feasible that under RG97, investors become more sensitive to the costs charged and seek lower cost alternatives, potentially leading to fund outflows. FUND RISKS Zenith has identified the following key risks associated with the Page 2 of 9

3 Fund; this is not intended to highlight all possible risks: STOCK SPECIFIC RISK: Given the concentrated nature of this Fund, stock specific risk is higher than for more diversified Australian equity offerings. Given the Fund only holds the constituents in the Solactive Australia 20 Index, this has the potential to magnify losses. KEY PERSON RISK: Notwithstanding the passive and quantitative investment approach employed by BetaShares, Zenith notes that key departures may still have a material impact while the team remains small. Specifically, Zenith believes key person risk is evident with Chief Investment Officer, Louis Crous. TURNOVER RISK: Increased Index activity due to constituent changes and corporate activity may increase portfolio turnover, giving rise to issues surrounding taxation and efficiency regarding portfolio trading costs. COUNTERPARTY RISK: The effective functioning of ETFs rely on numerous counterparties including the Authorised Participants and Approved Financial Institutions (swap counterparties). Any default of these parties obligations is likely to have a negative impact. DERIVATIVE RISK: The Fund may use derivatives. There are multiple risks associated with the use of derivatives; for example, the value of the derivative may not move in line with the underlying asset, counter-parties to the derivative may not be able to meet payment obligations (relevant when purchasing an option) or a particular derivative may be difficult or costly to trade. Derivative risk is mitigated in part through the Fund only using exchange traded options. BULL MARKET RISK: In strong bull markets, the Fund may underperform long-only domestic funds due to the lower than market net exposure. If the Fund sells call options prior to the market experiencing strong positive capital growth, the Fund will likely be 'called away' (have the sold option exercised) with the Fund having to repurchase the stock at a premium to the sale price. QUALITATIVE DUE DILIGENCE ORGANISATION Established in 2009, BetaShares Capital Ltd (BetaShares) is a specialist provider of ETFs and first launched a listed product in BetaShares is a wholly owned subsidiary of BetaShares Holdings Pty Ltd (BSH) which is a subsidiary of Mirae Asset Global Investment Group (Mirae), with material minority stakes held by the BetaShares management team (currently 44.5%) and private investors (2.5%). As at 31 August 2017, BetaShares had $4.7 billion in funds under management across 42 managed products. Mirae, established in 1997, is a large Asian asset manager based in South Korea managed in excess of $US 100 billion in assets as at 31 August Mirae offers global support to BetaShares, through its 85% stake in Horizons ETFs, as well as strategic direction at the board level. Horizons ETFs (formally BetaPro Management Inc.) offers to market a broad ETF product range including equities, fixed income, commodities and currencies, overlaid with a range of styles such as leveraged, inverse, inverse leveraged, spreads and volatility. Horizons ETFs had more than $US 6.6 billion in assets under management as of 31 August As a result of the partnership with Mirae/Horizons ETFs, BetaShares' management team has greater access to global information regarding best practices, trading techniques, infrastructure, risk management systems and market information. Although BetaShares' technology, systems and resources are not as sophisticated as the majority of its ETF peers, Zenith believes Mirae's strategic ownership and operational support enable it to meet the Fund's objective. The BetaShares Board has four members, David Nathanson, Alex Vynokur, Thomas Park and Taeyong Lee. Respectively, Park and Lee are Mirae's Head of Global Business Strategy and Global Head of ETF Business. Though Zenith notes the presence of Mirae Directors on the BetaShares Board as a positive, we would prefer to see at least some level of independent representation if not an independent majority as we believe this to be a best practice initiative. The Fund's market capitalisation was approximately $399 million as at 31 August INVESTMENT PERSONNEL Name Title Tenure Louis Crous Chief Investment Officer 9 Yr(s) Thong Nguyen Portfolio Manager 7 Yr(s) Don Hoang Chamath De Silva Assistant Portfolio Manager Assistant Portfolio Manager 4 Yr(s) 2 Yr(s) BetaShares currently have a staff of 34 located in their Sydney and Melbourne offices with four team members making up the investment team. All BetaShares ETFs are under the day to day operational control of its Chief Investment Officer, Louis Crous. Crous has over 14 years experience in financial services from prior roles at nabinvest and Rand Merchant Bank. Supporting Crous is Senior Portfolio Manager, Thong Nguyen. Nguyen has 12 years experience including previous roles at Three Pillars Portfolio Managers. In addition, further support is provided by two Assistant Portfolio Manager's Don Hoang and Chamath De Silva. Zenith notes the departure of BetaShares' Head of Quantitative Research & Portfolio Manager, Thomas Reif, in May Though Zenith views Reif's departure as disappointing we acknowledge his limited tenure. That said, the BetaShares product suite has expanded rapidly in recent years and while it has not presented any adverse issues to date, Zenith believes the investment team is less well resourced compared to peers. Although the Fund's approach is traditionally process based, which limits the threat of key person risk, Zenith sees a degree of key person risk with Crous. Overall, Zenith believes the experience of the portfolio management team is adequate. However, we believe that the BetaShares investment team has less experience in ETF Page 3 of 9

4 management than their larger peers. INVESTMENT OBJECTIVE, PHILOSOPHY AND PROCESS The Fund aims to deliver three outcomes to investors: 1. Provide an income yield that exceeds dividends and franking credits paid on the Solactive Australia 20 Index. 2. Provide a lower level of volatility than the Solactive Australia 20 Index. 3. Provide capital upside. To achieve its investment objective, the Fund seeks to earn income from dividends, franking credits and option premium while participating in some capital appreciation from holding a passive portfolio of stocks that mirror the Solactive Australia 20 Index at their Index weights. SECURITY SELECTION Stock selection is purely driven by changes in the Solactive Australia 20 Index. The Fund's full replication approach means that stocks entering or exiting the Index are required to be bought on the day that the changes are effected. However, in practice, weighting may differ slightly to improve the Fund's efficiency. In addition to dividends and franking credits earned on the stocks held, the Fund generates additional income by selling short-term (one to three month maturity), out-of-the-money (3% to 7%) exchange traded call options on a monthly basis over 100% of the underlying share portfolio. Call options will be sold only if a specified level of premium is generated at the target strike price. BetaShares expects to achieve an average option premium yield of 3% p.a. to 6% p.a. over the medium-term. BetaShares' option writing approach is based on research published by SIRCA for the ASX, which is in line with the approach taken by BetaShares' parent organisation, Mirae. The approach for the Fund involves selling call options on individual stock names in the Solactive Australia 20 Index with strike prices which will depend on the prevailing levels of volatility. This gives BetaShares the ability to respond to changing market conditions and dynamically adjusts the option strike price at which call options are sold based on implied volatility. For example, in more volatile market environments a security's strike price will be higher. This is in contrast to adopting a fixed strike price rule where the potential for the underlying stock being 'called away' is higher, which reduces the premium income generated. Option positions may be executed over several days rather than at a designated schedule, which minimises the potential for frontrunning and to minimise market impact. Overall, Zenith believes that given the Fund's systematic process, we would prefer BetaShares provide an explicit benchmark (internally or externally), against which the options strategy can be assessed. We believe that this transparency will improve the accountability of BetaShares and ultimately the Fund. In August 2018, BetaShares changed the Fund index from the Solactive Australia 20 Index to the Solactive Australia 20 Index. Although both indices use a market capitalisation weighting methodology, Zenith notes there are likely to be minor differences in constitutes between the two indices over time as a result of buffer rules. However, given the high weighting to the top ten in each index, and the strategy of the Fund, differences in fund performance should be relatively minimal. INDEX CONSTRUCTION The Fund passively holds all shares included in the Solactive Australia 20 Index at their constituent weight. The float adjusted market capitalisation construction results in a highly concentrated index. Though the Index covers 46% of the Australian equity market, the largest sector exposure in the Index is to Financials, which represents over 59% as at June Owing to its concentration, Zenith believes the Fund should be blended with domestic small and mid-capitalisation equities, as well as international equities. The Index is highly liquid, actively traded and rebalances quarterly, in March, June, September and December. The Fund's portfolio turnover is driven by constituent changes in the Index. The Fund's turnover is expected to be between 10% p.a. and 15% p.a. which Zenith considers to be low. RISK MANAGEMENT BetaShares has in place risk management guidelines for the Fund, which Zenith believes to be adequate. At the single stock level, the Fund has a 0.05% maximum weighting deviation. The Fund does not formally set a Tracking Error objective however it is expected to be between 2% p.a. and 3% p.a. The Fund's options positions are monitored daily, with portfolio managers assessing factors which affect changes in option prices. The Fund is not permitted to sell options on more than 100% on a stock at any time, meaning the Fund will not sell naked call options. BetaShares writes European options (exercisable only at maturity) over expiry periods where an ex-dividend date exists on a particular security. This precludes holders of in-the-money call options from exercising their rights before an ex-dividend date in order to receive underlying stock dividends. Zenith considers this approach to be suitable, which prevents the underlying stock from being called and protects option premium income. BetaShares will repurchase American options when a $1 movement in the underlying stock will equate to a $0.95 movement in the option price, to prevent the underlying stock being called away and to manage the risk in price movement prior to repurchase. INVESTMENT FEES Exchange Traded Funds (ETFs), contain a variety of explicit and implicit costs to the investor. Investors should be aware that poor ETF selection and/or trade execution can diminish any advantage gained by the lower management cost exhibited by ETFs in comparison to managed funds more broadly. Management Cost The management cost for the Fund was reduced from 0.79 to 0.76% p.a. in August There is no performance fee. Overall, Zenith considers the management cost to be materially higher than the average Australian Shares Alternative Beta Page 4 of 9

5 ETF. However, Zenith notes the Fund is more competitive against strategies found in Zenith's Australian Equity Income - Derivative Overlay managed funds category. Bid/ask spread As listed products, investors are exposed to bid/ask spreads as an intangible cost of investment and divestment. The bid/ask spread is primarily a function of market liquidity in fund units as well as the presence of the maximum bid/ask spreads which are maintained by authorised participants and market makers. It should be noted that as a safeguard in the absence of a natural market in which two investors are transacting in the Fund, market makers ensure the maximum spread is limited to a pre-agreed spread limit. It is important to note however that bid/ask spreads tend to be at their highest and most volatile at the start and end of the trading day and decreases during the course of the day s trade as efficiency improves. Investors are able to use Indicative Net Asset Values (INAV) as an indication of the underlying fair value of an ETF during trading hours. As at 31 July 2017, the Fund has demonstrated trading spreads higher than peers in the Australian Shares Large Companies Alternative Beta ETF sector. Market Makers fulfil the role of generating necessary liquidity on the secondary market by providing continuous bid and offer prices acting as both the purchaser or seller of the ETF units, and applying for additional ETF units, where necessary, to meet investor demand. BetaShares currently uses three market makers for the Fund. Authorised Participants (APs) comprise the entities which are approved by the ETF Issuer to purchase ETF units in the primary market. BetaShares currently uses five AP's for the Fund. Page 5 of 9

6 PERFORMANCE ANALYSIS Report data: 31 Aug 2018, product inception: Dec 2012 Monthly Performance History (%, net of fees) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC FUND YTD BM1 YTD BM2 YTD Benchmark 1: Solactive Australia 20 Index (GTR), Benchmark 2: S&P/ASX 300 (Accum) Growth of $10,000 ABSOLUTE PERFORMANCE ANALYSIS Return Incpt. 5 yr 3 yr 1 yr Fund (% p.a.) Benchmark 1 (% p.a.) Benchmark 2 (% p.a.) Median (% p.a.) Ranking within Sector Incpt. 5 yr 3 yr 1 yr Fund Ranking 16 / / / / 41 Quartile 4th 4th 4th 3rd Monthly Histogram Standard Deviation Incpt. 5 yr 3 yr 1 yr Fund (% p.a.) Benchmark 1 (% p.a.) Median (% p.a.) Downside Deviation Incpt. 5 yr 3 yr 1 yr Fund (% p.a.) Benchmark 1 (% p.a.) Median (% p.a.) Risk/Return Incpt. 5 yr 3 yr 1 yr Sharpe Ratio - Fund Minimum and Maximum Returns (% p.a.) Sortino Ratio - Fund NOTE ON PERFORMANCE - Performance data contained in this report is based on an ETFs end of day Net Asset Value (NAV) as opposed to the last market price. Zenith has elected to use NAV over last price as this eliminates extraneous trading noise which typically occurs at the end of the trading day. While we see this as a cleaner approach to assessing ETF performance, readers should be aware that actual performance of an ETF may differ depending on the timing of investment and divestment of holdings. All commentary below is as at 26 September The Fund aims to provide exposure to equities included in the Solactive Australia 20 Index, while providing quarterly income that exceeds the yield of a portfolio of the underlying shares over the medium term. The Fund also aims to provide lower volatility than the underlying portfolio. Page 6 of 9

7 In August 2018, BetaShares changed the Fund index from the S&P/ASX 20 Index to the Solactive Australia 20 Index. The Fund has underperformed the S&P/ASX 20 Index over all time periods up to that date. However, Zenith notes the Fund's strategy is not conducive to up markets given the option overlay is likely to result in the Fund failing to fully participate in market upswings. The volatility of the Fund, as measured by standard deviation, has been lower than the S&P/ASX 20 Index over all assessed time periods. RELATIVE PERFORMANCE ANALYSIS Alpha Statistics Incpt. 5 yr 3 yr 1 yr Excess Return (% p.a.) % Monthly Excess (All Mkts) Drawdown Analysis Fund BM1 BM2 Max Drawdown (%) Months in Max Drawdown Months to Recover Worst Drawdowns Fund Benchmark 1 Benchmark % Monthly Excess (Up Mkts) % Monthly Excess (Down Mkts) Beta Statistics Incpt. 5 yr 3 yr 1 yr Beta R-Squared Tracking Error (% p.a.) Correlation Risk/Return Incpt. 5 yr 3 yr 1 yr Information Ratio All commentary below is as at 31 August Since inception, the Fund has underperformed its assigned benchmark. However, Zenith notes that it has performed particularly well in down markets for all time periods assessed. Given the investment strategy, investors should expect the Fund will perform best in falling or flat market environments. The Fund's beta, which measures its sensitivity to market movement, is substantially lower than 1. This is evident of the fact that the Fund has a net market exposure less than 100%. Over all periods of assessment, the Beta has been approximately 0.8. The Fund does not target a level of Tracking Error, however it is expected to be between 2% p.a. to 3% p.a. primarily due to its options overlay. To date, the Fund has delivered a Tracking Error above up the upper end of its expected range since inception. DRAWDOWN ANALYSIS Drawdown analysis assesses the relative riskiness of a Fund versus the benchmark, in reference to capital preservation. The maximum Drawdown is recorded as the percentage decline in the value of a portfolio from peak to trough (before a new peak is achieved). All Drawdown analysis is calculated commencing from the inception date of the Fund in question, and Drawdown analysis for the Fund and benchmark(s) are calculated independently. That is, the largest drawdown for the Fund and benchmark(s) will not always refer to the same time period. All commentary below is as at 26 September Consistent with the Fund's low market exposure, drawdowns have been smaller than that of the S&P/ASX 20 Index tracked by the Fund up until August However, the Fund's drawdown profile indicates its relative riskiness exceeds that of the broader Australian equities market. Zenith believes investors should note the underlying equity portfolio's concentration to the financials sector, and seek to diversify their equities exposure. INCOME/GROWTH ANALYSIS Income / Growth Returns Income Growth Total FY to 30 Jun % -1.01% 8.19% FY to 30 Jun % 1.31% 10.73% FY to 30 Jun % % -5.49% FY to 30 Jun % -8.45% -0.34% FY to 30 Jun % 4.61% 14.90% FY to 30 Jun % 6.67% 8.92% The Fund aims to provide quarterly income that exceeds the yield of a portfolio of the underlying shares over the medium term. However, investors should be aware the Fund does not Page 7 of 9

8 target a specific income level. To date, the Fund has delivered on its yield objective. However, Zenith notes that in rising markets, this will frequently be at the cost of total return. The Fund is best suited to income seeking investors who desire a lower level of volatility. Given the nature of the strategy employed by the Fund, portfolio turnover is expected to be high. Therefore, Zenith believes the Fund may suit investors with lower marginal tax rates. REPORT CERTIFICATION Date of issue: 4 Oct 2017 Role Analyst Title Author Jacob Smart Investment Analyst Sector Lead Authoriser Dugald Higgins Dugald Higgins Head of Property & Listed Strategies Head of Property & Listed Strategies RATING HISTORY As At Rating 4 Oct 2017 Approved 17 Oct 2016 Approved 24 Sep 2015 Recommended 4 Sep 2014 Recommended Last 5 years only displayed. Longer histories available on request. Page 8 of 9

9 DISCLAIMER AND DISCLOSURE Zenith Investment Partners (ABN ) is the holder of Australian Financial Services Licence and is authorised to provide general financial product advice. This Product Assessment Report (report) has been prepared by Zenith exclusively for Zenith clients and should not be relied on by any other person. Any advice or rating contained in this report is limited to General Advice for Wholesale clients only, based solely on the assessment of the investment merits of the financial product. This report is current as at the date of issue until it is updated, replaced or withdrawn and is subject to change at any time without notice in line with Zenith s regulatory guidelines. Zenith clients are advised to check the currency of reports and ratings via Zenith s website for updates. Any advice contained in this report has been prepared without taking into account the objectives, financial situation or needs of any specific person who may read it. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek their own independent financial advice, obtain a copy of, and consider any relevant PDS or offer document and consider the appropriateness of this advice in light of their own objectives prior to making any investment decision. Zenith charges an upfront flat fee to the Product Issuer, Fund Manager or other related party to produce research on funds that conform to Zeniths Research Methodology. Zenith s fee and Analyst remuneration are not linked to the rating outcome in any way. Views expressed in Zenith reports accurately reflect the personal, professional, reasonable opinion of the Analyst who has prepared the report. Zenith may also receive a fee for other non-research related services such as subscription fees for Zenith s research services and/or for the provision of investment consultancy services. Conflicts management arrangements are in place where Zenith provides research services to financial advisory businesses who provide financial planning services to investors and are also associated entities of the product issuers, with any such conflicts of interest disclosed within reports as appropriate. Full details regarding such arrangements are outlined in Zenith s Conflicts of Interest Policy /ConflictsOfInterestPolicy Zenith s research process seeks to identify investment managers considered to be the best of breed through a comprehensive, multi-dimensional selection process. Zenith utilises both quantitative and qualitative factors in its ratings models. Models maximise commonality across different asset classes while retaining flexibility for specialist asset classes and strategies. The selection process is rigorous in both its qualitative and quantitative analysis and each component is equally weighted. Zenith does not manage any proprietary assets and as such Zenith is able to choose investment managers with absolute independence and objectivity. More detailed information regarding Zenith s research process, coverage and ratings is available on Zenith s website /ResearchMethodology This report is subject to copyright and may not be reproduced, modified or distributed without the consent of the copyright owner. The information contained in this report has been prepared in good faith and is believed to be reliable at the time it was prepared, however, no representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this report. Except for any liability which cannot be excluded, Zenith does not accept any liability, whether direct or indirect arising from the use of information contained in this report. Past performance is not an indication of future performance. Full details regarding the methodology, ratings definitions and regulatory compliance are available at /RegulatoryGuidelines 2018 Zenith Investment Partners. All rights reserved. Zenith has charged BetaShares Capital a fee to produce this report. Page 9 of 9